Thursday, October 15, 2009

It pays to pay attention to those who command premium prices. In the weekly news magazine market, The Economist is by far the leader in actually getting their customers to pay.

Charlie Rose had Economist editor John Micklethwait on recently and he talked about their strategy for the Kindle. (Note: this is my transcription - not official)

Micklethwait: The interesting one to me is the Kindle. If you want an example of the difference between us and other magazines. If you look at the Kindle, we charge $10 per month. Virtually every other magazine charges $2 or $3 per month. And the reason why we charge that is because we have worked out that that is what we need to make money from it. Remember that you can't carry advertising at all on the Kindle, and what worries me a bit from the perspective of the other magazines is that they are all looking at the Kindle as a little bit of incremental business. We're looking at it as something which we think long term, it or its descendants or a derivative of it would replace a chunk of the print magazine.

Charlie: It has to stand alone.

Micklethwait: Yeah and you have to look at it as something that could eventually cannibalize your product. But ultimately I think that's exciting. I'm mean look we have distribute The Economist all the way around this country and all the way around the world. The idea that people with electronic e-readers could actually be getting this almost immediately on a Thursday evening or Friday morning - that's a very exciting idea.

Time and Newsweek are struggling and changing their strategies. The Economist seems to be thriving. I think that The Economist's forward-thinking and confident perspective on the future of publishing is a big reason for this strength.

Wednesday, October 7, 2009

It's our philosophy here at DocMonk that publishers who respect their readers will have their copyrights respected in return. The inverse is that publishers who employ heavy-handed DRM technologies in an effort to stop theft of their intellectual property risk instigating a copyright arms-race.

A copyright arms-race happens when publishers continuously try harder and harder to lock down their publications, and readers feel more and more justified in trying to break the locks. The readers always win these contests in the end. We at DocMonk document this phenomenon in our favorite tweets.

Lately, I've been thinking about our philosophy as it relates to copyright law. Nothing is more heavy-handed than our police and courts, so it seems that the same principles that we apply to DRM technologies might be applied to the law as well.

Is it possible that onerous copyright laws are actually encouraging copyright infringement?

The length of terms and severity of sanctions of copyright law have steadily increased over the years. The first US copyright law was passed in 1790 and granted a 14 year term for copyright, plus the opportunity to renew the copyright for another 14 years for one time only. Today, copyright holders have a term that extends to 70 years past the death of the creator, or up to 120 years for corporations. The Digital Millennium Copyright Act of 2000 included, for the first time, criminal penalties for certain forms of copyright infringement. Previous laws had only focused on civil penalties.

It's important to remember that the purpose of copyright, as stated by the US Constitution, is to "promote the Progress of Science and the useful Arts." The question is, are ever-longer copyright terms and increased penalties promoting or hindering this objective? Equally important, do these laws actually succeed in decreasing the losses suffered by copyright holders?

Copyright in the Real World

Google Books is a project that aspires to scan and index all of the books ever published. According to the New York Times, they have already scanned about 7 million books. However, an astounding 4 to 5 million of those books are "orphaned" This means that that the copyright is still in force, but the copyright holders (or more likely their heirs) cannot be located or are not willing to take steps to make the work available.

It's shocking that a majority of the books in the Google database are in this situation. You can't buy a copy, but you can't legally make a copy on your own either.

Now you may be able to see where I'm going with this. Cue movie trailer guy:

In a world where millions of books aren't available for sale, and can't be legally copied, how quickly will consumers learn to infringe routinely, even for first-run, brand new material?

In most cases, copying an orphaned work really is a victimless crime because the rights-holder just isn't interested. There may be rare cases where works of significant interest are orphaned because the heirs are unaware they they own the rights. Somewhere, there might be some snotty kid who isn't aware that great-granddad was Ernest Hemingway - but I don't think that happens very often.

Introducing the Slippery Slope

Once consumers get used to copying orphaned works, where does the infringement end? It's not a great leap to go from, "I'll just do it one time because there really is no other option" to "Why should I pay for the new Harry Potter book? I'll just download it. I learned how to do it that time when I needed that obscure book that was written in 1942."

The Case for Shorter Copyright Terms

Copyright law should only cover works that are worth protecting. Fourteen years (the original law) sounds about right. That way, content creators will be able to make a coherent case that copyright infringement really is theft, and not just a victimless crime. Meanwhile, millions of works that are currently orphaned would enter the public domain, to "promote the Progress of Science and the useful Arts."